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>The CEO directly created the perverse incentive: actually hitting your goals only meant more work. You say this as if employees are absolved of any responsibi

>The CEO directly created the perverse incentive: actually hitting your goals only meant more work. You say this as if employees are absolved of any responsibility to the performance of the company. You're not clever for saying, "Oh, 100% means we weren't ambitious? Then we'll work 80% as hard." In fact, I think you'd have to be pretty dense to not understand the intention of the KPI: set lofty goals and try to get there. If you don't think it's working, why not go back with ideas to improve it, rather than doing less work? I mean, this company literally failed (from the sounds of it) and people here are blaming the CEOs KPIs versus the employees who intentionally work less to game the system. Strange.

Consultant32452 3y ago
I don't care if the company fails and there's no amount of emotional manipulation that can ever make me care. Only double-digit percentage ownership could make me care. Of course you can't get double-digit percentage ownership of a big company like Facebook, but in a company that big there's almost nothing I'm doing to move the needle anyways so there's no reason to be concerned, any shares are gambles. I do care about my professional reputation. I'm highly skilled and understand how to improve social dynamics on a team, making me very valuable to have around. Clever leadership will figure out a way to align my skills with their own goals. But, if they don't, that's their problem.
- ryandrake 3y ago
  > I don't care if the company fails and there's no amount of emotional manipulation that can ever make me care. Only double-digit percentage ownership could make me care. That's the bottom line, isn't it? If the CEO wants to align employees' behavior and motivation with his own, he needs to structure the employees' compensation to be like his own compensation. If my compensation is just a "competitive" salary and a few token stonks, then I'm going to do a 9-5 job and hit the required 80% of my KPIs before I go home for the day. If my compensation consists of life-changing equity? I'll work days, nights, weekends, and holidays.
  - HWR_14 3y ago
    How many people can a company scale to where they all get "life changing equity"? Certainly N<10 if you want double digit equity.
    - ryandrake 3y ago
      You don't need to give each individual employee double digit percentage (>10%) equity for it to be life changing. Let's say "life changing" for a normal worker-bee tech worker is ~$500K and the company is an average, run-of-the-mill $5B market cap company. We're talking about a 0.01% share for each employee. If you have 1000 employees, totaled up 10% represents life-changing equity for all 1000 of them. Hoping my math is not off by a factor of 10 or something.
      - HWR_14 3y ago
        Does that ratio of market cap to employee count hold up often? I don't think it does. You think most 200+ Employee companies are unicorns?
    - Consultant32452 3y ago
      It's important not to confuse "I don't care if your company lives or dies" with "I'm going to be a bad worker." I'm an amazing worker. As I said, I care about my professional reputation. When/if the company dies I want every single one of my former coworkers fighting to get me hired at wherever they land. You don't get former coworkers clamoring to get you in at their new shop by being a bad worker. Companies want me to work for them, and former coworkers want me to work with them. I am just not emotionally invested in the companies who pay me a wage, I'm going to set reasonable boundaries on my time, and I'm generally going to respond rationally to incentives. Responding rationally to incentives includes considering if the extra work required to achieve a particular bonus is worth the effort, often it is not.
mitthrowaway2 3y ago
As it turns out, crafting good incentives is the responsibility of management, it's a really hard problem, and CEOs tend to be reluctant to use the same method that boards use to incentivize them: a gigantic package of long-dated stock options. Maybe they think it doesn't work very well.
shortrounddev2 3y ago
As the saying goes: if everyone around you is an asshole, you're the asshole. If you create a system which is abused by 100% of employees, that's on you. Everyone who works at a company does so for their own personal benefit. You can moralize about it if you want, but I doubt you would work for a company if it didn't provide an incentive structure of some kind. > why not go back with ideas to improve it I was a junior developer working for a 1500 person company. What should I do, demand an audience with the CEO, who lived in a different country?
- gmd63 3y ago
  The incentive structure is make money by creating things or providing services that other people want to pay for. Most people willingly turn their brain off when it comes to evaluating their daily/quarterly performance against that simple truth.
Goronmon 3y ago
If you don't think it's working, why not go back with ideas to improve it, rather than doing less work? Doesn't sound like "less work", it sounds like they did the amount of work management wanted them to do. Just like working 40 hours a week is "less work" than 60 hours a week, but I'm not going to work 60 hour weeks just because of some sentimentality around the company being successful.
ImPostingOnHN 3y ago
> If you don't think it's working, why not go back with ideas to improve it, rather than doing less work the description give didn't make me think it's the kind of workplace where the CEO is going around asking people, "what can I fundamentally change about our goal setting process?" in any case, goals should be achievable, so if you punish someone for achieving them, you messed up
fendy3002 3y ago
Goodhart's law: https://en.m.wikipedia.org/wiki/Goodhart%27s_law https://en.m.wikipedia.org/wiki/Goodhart%27s_law Tracking and measuring KPI is good, without it the company won't know it's current performance and how to fix / improve it (though beware on burnout). However when it's become target with financial incentive, it ceases to be good measure, because everyone will try to optimize things to reach the target. Velocity (work complete / planned * 100%) should always be a measurement, because it can help to identify errors in workflow / team member, and prevent demotivation when they need to perform task outside their goal.
unethical_ban 3y ago
If a boss gives me a list of five things to do and tells me if I do 4 of them that's perfect, 5 and I didn't set goals properly , I'm going to do 4. Particularly if my compensation depends on only doing 4. It boils down to that ridiculous "stretch goals shouldn't be achievable because you should be shooting for the unattainable". If you want to have that mindset, don't beat the exployees for achieving everything. Beat yourself for not curating their goals.
ppseafield 3y ago
> think you'd have to be pretty dense to not understand the intention of the KPI: set lofty goals and try to get there. So, hypothetically if I busted my ass for three months straight to hit 100%, just to be told "Oh, your goals were set too low, so here's more work", what incentive at that point do I have to work even harder? The new target's 80% was my last target's 100%, which I struggled to hit (because as you said, these goals are lofty). So if I bust my ass even more, do even more overtime, what do I get then? "Your goals were set too low, so here's more work." Do I just continue this until I burn out? Or do I hit 80 of my target so my workload doesn't spiral out of control, and I get exactly the same bonus? > I mean, this company literally failed (from the sounds of it) and people here are blaming the CEOs KPIs versus the employees who intentionally work less to game the system. Strange. Employees gaming their KPIs is a reaction to and a direct result of the CEO's "if you hit 100%, you didn't work hard enough" policy. CEOs using constantly moving targets and increasingly unrealistic expectations to extract every last drop of productivity out of their employees is met with an equally maximizing reaction: employees find a maximum amount of time and energy they can spend such that the status quo is preserved and the bar doesn't move as high next time. I would bet KPIs were not the main reason that company went under. Obviously we don't have specifics, and companies rarely fail for one reason. I didn't blame the CEO for the company going under either - I simply pointed out the perverse incentive.

Consultant32452 3y ago

I don't care if the company fails and there's no amount of emotional manipulation that can ever make me care. Only double-digit percentage ownership could make me care. Of course you can't get double-digit percentage ownership of a big company like Facebook, but in a company that big there's almost nothing I'm doing to move the needle anyways so there's no reason to be concerned, any shares are gambles. I do care about my professional reputation. I'm highly skilled and understand how to improve social dynamics on a team, making me very valuable to have around. Clever leadership will figure out a way to align my skills with their own goals. But, if they don't, that's their problem.

ryandrake 3y ago
> I don't care if the company fails and there's no amount of emotional manipulation that can ever make me care. Only double-digit percentage ownership could make me care. That's the bottom line, isn't it? If the CEO wants to align employees' behavior and motivation with his own, he needs to structure the employees' compensation to be like his own compensation. If my compensation is just a "competitive" salary and a few token stonks, then I'm going to do a 9-5 job and hit the required 80% of my KPIs before I go home for the day. If my compensation consists of life-changing equity? I'll work days, nights, weekends, and holidays.
- HWR_14 3y ago
  How many people can a company scale to where they all get "life changing equity"? Certainly N<10 if you want double digit equity.
  - ryandrake 3y ago
    You don't need to give each individual employee double digit percentage (>10%) equity for it to be life changing. Let's say "life changing" for a normal worker-bee tech worker is ~$500K and the company is an average, run-of-the-mill $5B market cap company. We're talking about a 0.01% share for each employee. If you have 1000 employees, totaled up 10% represents life-changing equity for all 1000 of them. Hoping my math is not off by a factor of 10 or something.
    - HWR_14 3y ago
      Does that ratio of market cap to employee count hold up often? I don't think it does. You think most 200+ Employee companies are unicorns?
  - Consultant32452 3y ago
    It's important not to confuse "I don't care if your company lives or dies" with "I'm going to be a bad worker." I'm an amazing worker. As I said, I care about my professional reputation. When/if the company dies I want every single one of my former coworkers fighting to get me hired at wherever they land. You don't get former coworkers clamoring to get you in at their new shop by being a bad worker. Companies want me to work for them, and former coworkers want me to work with them. I am just not emotionally invested in the companies who pay me a wage, I'm going to set reasonable boundaries on my time, and I'm generally going to respond rationally to incentives. Responding rationally to incentives includes considering if the extra work required to achieve a particular bonus is worth the effort, often it is not.

mitthrowaway2 3y ago

As it turns out, crafting good incentives is the responsibility of management, it's a really hard problem, and CEOs tend to be reluctant to use the same method that boards use to incentivize them: a gigantic package of long-dated stock options. Maybe they think it doesn't work very well.

shortrounddev2 3y ago

As the saying goes: if everyone around you is an asshole, you're the asshole. If you create a system which is abused by 100% of employees, that's on you. Everyone who works at a company does so for their own personal benefit. You can moralize about it if you want, but I doubt you would work for a company if it didn't provide an incentive structure of some kind. > why not go back with ideas to improve it I was a junior developer working for a 1500 person company. What should I do, demand an audience with the CEO, who lived in a different country?

gmd63 3y ago
The incentive structure is make money by creating things or providing services that other people want to pay for. Most people willingly turn their brain off when it comes to evaluating their daily/quarterly performance against that simple truth.

Goronmon 3y ago

If you don't think it's working, why not go back with ideas to improve it, rather than doing less work? Doesn't sound like "less work", it sounds like they did the amount of work management wanted them to do. Just like working 40 hours a week is "less work" than 60 hours a week, but I'm not going to work 60 hour weeks just because of some sentimentality around the company being successful.

ImPostingOnHN 3y ago

> If you don't think it's working, why not go back with ideas to improve it, rather than doing less work the description give didn't make me think it's the kind of workplace where the CEO is going around asking people, "what can I fundamentally change about our goal setting process?" in any case, goals should be achievable, so if you punish someone for achieving them, you messed up

fendy3002 3y ago

Goodhart's law: https://en.m.wikipedia.org/wiki/Goodhart%27s_law https://en.m.wikipedia.org/wiki/Goodhart%27s_law Tracking and measuring KPI is good, without it the company won't know it's current performance and how to fix / improve it (though beware on burnout). However when it's become target with financial incentive, it ceases to be good measure, because everyone will try to optimize things to reach the target. Velocity (work complete / planned * 100%) should always be a measurement, because it can help to identify errors in workflow / team member, and prevent demotivation when they need to perform task outside their goal.

unethical_ban 3y ago

If a boss gives me a list of five things to do and tells me if I do 4 of them that's perfect, 5 and I didn't set goals properly , I'm going to do 4. Particularly if my compensation depends on only doing 4. It boils down to that ridiculous "stretch goals shouldn't be achievable because you should be shooting for the unattainable". If you want to have that mindset, don't beat the exployees for achieving everything. Beat yourself for not curating their goals.

ppseafield 3y ago

> think you'd have to be pretty dense to not understand the intention of the KPI: set lofty goals and try to get there. So, hypothetically if I busted my ass for three months straight to hit 100%, just to be told "Oh, your goals were set too low, so here's more work", what incentive at that point do I have to work even harder? The new target's 80% was my last target's 100%, which I struggled to hit (because as you said, these goals are lofty). So if I bust my ass even more, do even more overtime, what do I get then? "Your goals were set too low, so here's more work." Do I just continue this until I burn out? Or do I hit 80 of my target so my workload doesn't spiral out of control, and I get exactly the same bonus? > I mean, this company literally failed (from the sounds of it) and people here are blaming the CEOs KPIs versus the employees who intentionally work less to game the system. Strange. Employees gaming their KPIs is a reaction to and a direct result of the CEO's "if you hit 100%, you didn't work hard enough" policy. CEOs using constantly moving targets and increasingly unrealistic expectations to extract every last drop of productivity out of their employees is met with an equally maximizing reaction: employees find a maximum amount of time and energy they can spend such that the status quo is preserved and the bar doesn't move as high next time. I would bet KPIs were not the main reason that company went under. Obviously we don't have specifics, and companies rarely fail for one reason. I didn't blame the CEO for the company going under either - I simply pointed out the perverse incentive.